Roger Hardy, who in February sold web-only eyewear company Coastal Contacts for $385.7 million, will consolidate OnlineShoes.com and ShoeMe.ca.
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RadioShack also wants to keep improving the overall customer experience on the site, a key consideration in the switch to a new platform that provides capabilities and functions the previous one did not. Central among those is improved content management and perhaps most importantly, the ability to accept structured data. On the old platform, for example, the site couldn’t support side-by-side comparison of multiple DVD players because the data in its system was not structured. And that was just one tipping point guiding the way to a significant upgrade. “We didn’t think the previous platform could be made to work and could bring to market the capabilities and services we needed in a timely manner,” says Hamilton.
Ultimately, to position itself for the future, RadioShack not only launched a new consumer facing site on the GSI platform, but wound up re-configuring its workflow to do it. To improve the process by which it creates the content it would feed to its now outsourced e-commerce platform and, long term, to other parts of the company, it implemented a new IBM Websphere content management system prior to going live with GSI. To staff it, a dedicated in-house content management team was created, pulling copywriters and others from marketing staff as well creating some new positions and adding new hires. “We reengineered the entire workflow. We build out specs, features and products and we feed those assets to GSI, which in turn displays them on our web site. Even though they are in effect our IT shop, there is a lot of integration work that connects the two companies,” says Hamilton.
It was a near year-long implementation to bring up the new content management system, move to GSI and launch the new site, but in Radio Shack’s view, a needed change made right on schedule given the pace of online retail’s development. “A channel shift has taken place in retail,” says Hamilton. “Launching with GSI is just the first step in a multi-channel journey that continues to evolve.”
With companywide sales up 4.1% to $4.8 billion in 2004, web sales, estimated by Internet Retailer at $50.9 million in 2004, up 10% over 2003, are growing even faster. That means companies such as RadioShack stand to lose big if technology supporting their web site doesn’t keep up with increased demand. But the impact of e-retail’s accelerated growth can be felt just as keenly by even the smallest e-retailers. With annual sales still under $5 million, tiny, 4-year-old Bonjour Fleurette, which sells women’s slippers direct online and through retailers’ stores, was processing a handful of orders per month on its web site until the day in 2003 when the slippers were featured on Oprah Winfrey’s annual “Favorite Things” TV show. Overnight, hits on the web site went up to 1.5 million, says Jerry Seltzer, senior vice president of sales and marketing and COO. “It was the best, and it was the worst,” Seltzer says. “It brought us customers, and it drove customers away.”
Locking up the system
Its web site could handle accepting the orders; the problem was a non-integrated back-end system, into which orders had to be manually re-entered and that also was supposed to handle accounting and other office functions. When company staff was entering the large volume of orders into the back-end, the system was unable to handle any other tasks; for example, printing shipping labels. “When we tried to take orders off the web site, no one else could use the system for anything, because it was flooded,” says Seltzer. “For two or three months it was a nightmare.”
With a limited ad budget, Bonjour Fleurette looks to consumer media placements to help publicize its products. While extreme, the spikes in traffic produced by the Oprah show follow a pattern now recognized by the company. A recent placement on the Tyra Banks TV talk show, for example, doubled traffic to the site overnight, Seltzer says. Given that, Bonjour Fleurette could expect more of the same from its old system with every media placement, a situation that in 2004 helped precipitate a switch from its former system to the hosted services of NetSuite.
“It’s our accounting, marketing and e-commerce platform,” says Seltzer. “The system now does credit card verification, which we’d been doing manually, automatically.” That’s shortened the time required to get an order out the door, with the company now able to ship the same day on orders received by 1 p.m. Pacific time.
NetSuite also has provided automated service it didn’t have access to under its old system. For example, it saves customer names and sets them up for periodic e-mail blasts, such as when a new style becomes available. The system even reflects near real-time inventory; for example, preventing the web site from accepting an order for three pairs of a style if only two are in stock. “Everybody in the office is using this system, but it doesn’t slow down,” says Seltzer. “For us, the web has become automatic.”
Serving the repeat customer
Seltzer notes that the web now represents about 5% of sales and that the number of unique visitors per month, about 15,000 to 20,000, has doubled or tripled from last year. With growth on the fast track, he’s already thought ahead to the demands more traffic and the need for more functionality would place on the current system. In that case, he says, he can simply buy another level of service form the same vendor to handle it. But untapped capacity is already in the level of service from NetSuite now in place. “We could double or triple and it wouldn’t affect where we are now. We haven’t approached the upper limits of this system,” he says.
When Carrot Ink founder and president John Howard looked at the future of his web-based inkjet and laser cartridge company, he saw not only the need to upgrade back end systems to accommodate growth, but a reason to choose a particular type of vendor. The company had been using what he describes as an archaic off-the-shelf platform for its web site that didn’t support customer functionality he wanted to add, such as the ability to create an account or repeat a previous order-a key function given that repeat customers represent about 75% of his business. It also made it difficult to merchandise on the site in the way Howard wanted to, because it allowed products to be listed in one category only, sometimes making them difficult to find through existing navigational paths.